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Martin Energy Services, LLC v. M/V Bourbon Petrel

United States District Court, E.D. Louisiana

June 6, 2019

MARTIN ENERGY SERVICES, LLC
v.
M/V BOURBON PETREL, her engines, tackle, bunkers, Etc., in rem, and BOURBON PETREL SNC AND BOURBON OFFSHORE GREENMAR, S.A., in personam

         SECTION "L" (4)

          FINDINGS OF FACT AND CONCLUSIONS OF LAW

         I. FACTUAL AND PROCEDURAL HISTORY

         These consolidated cases arise out of three instances in which Plaintiff Martin Energy Services, LLC (“Martin Energy”) supplied fuel and water to a fleet of vessels chartered by C.G.G. Services, U.S., Inc. (“CGG”). In the fall of 2014, CGG was conducting seismic operations off the coast of Louisiana with the GEO CELTIC, OCEANIC SIRIUS, and OCEANIC VEGA (collectively, the “Seismic Vessels”). CGG was responsible for ensuring that the Seismic Vessels were supplied with fuel and water.

         Before the three fuel deliveries at issue in this case, CGG purchased fuel directly from suppliers like Martin Energy. In October 2014, however, CGG reached its credit limit with Martin Energy and began purchasing fuel for the Seismic Vessels through O.W. Bunker USA Inc. (“O.W. Bunker”). Martin Energy was selected as supplier of the fuel because it offered the lowest sales price.

         The fuel was delivered to the Seismic Vessels by three supply vessels - the M/V BOURBON PETREL, the M/V OMS RESOLUTION, and the M/V MISS LILLY (collectively, the “Supply Vessels”). Soon after, O.W. Bunker declared bankruptcy and failed to pay Martin Energy for the three fuel deliveries. Martin Energy sued each of the Supply Vessels in rem, claiming a maritime lien for the amounts owed for the bunkering. The vessels deny in rem liability.

         This case mirrors dozens of in rem actions resulting from the global collapse of O.W. Bunker and related bankruptcy proceedings. It presents two issues in particular: (1) whether CGG controlled the selection of Martin Energy as physical supplier, and (2) whether the bunkers qualify as necessaries for the Supply Vessels (thereby triggering in rem liability) when they were ultimately consumed by the Seismic Vessels.

         The Court has carefully considered the testimony of the witnesses, the exhibits entered into evidence, the post-trial memoranda, and the entire record, and hereby enters the following findings of fact and conclusions of law. To the extent that a finding of fact constitutes a conclusion of law, the Court adopts it as such. And to the extent that a conclusion of law constitutes a finding of fact, the Court adopts it as such.

         II. FINDINGS OF FACT

         (1)

         Plaintiff Martin Energy is a Houston, Texas based provider of fuels, lubricants, and full-service logistical support along the United States Gulf of Mexico

         (2)

         CGG Services U.S., Inc. (“CGG”) is the United States subsidiary of CGG SA, a global geoscience company that conducts seismic operations for oil and gas companies.

         (3)

         In the fall of 2014, CGG U.S. was conducting seismic operations off the coast of Louisiana with the survey vessels M/V GEO CELTIC, M/V OCEANIC SIRIUS, and M/V OCEANIC VEGA (collectively, the “Seismic Vessels”).

         (4)

         CGG was responsible for ensuring that the Seismic Vessels were supplied with fuel and water. The fuel and water were delivered from Port Fourchon, Louisiana to the Seismic Vessels off the coast of Louisiana by three supply vessels: the M/V BOURBON PETREL, M/V OMS RESOLUTION, and M/V MISS LILLY (collectively, the “Supply Vessels”).

         (5)

         The M/V BOURBON PETREL is a Seismic Support Vessel. It was owned by SNC Bourbon CE Petrel. The M/V OMS RESOLUTION is also a Seismic Support Vessel that was owned by Rederij Groen BV. The M/V MISS LILLY is an Offshore Supply Vessel that was owned by Sea Support Ventures, LLC. All of the Supply Vessels were chartered directly or indirectly by CGG.

         (6)

         Prior to October 2014, CGG purchased fuel for the Seismic Vessels directly from the two suppliers at Port Fourchon, Martin Energy and Stone Oil. In October 2014, however, CGG had reached its credit limit with Martin Energy. Martin Energy informed CGG that CGG must either pay in advance or “free up space” on its credit limit before Martin Energy would sell any more fuel directly to CGG. CGG then began purchasing fuel for the Seismic Vessels from O.W. Bunker USA, Inc. (“O.W. Bunker”) pursuant to a September 16, 2013 Bunker Supply Contract.

         (7)

         When purchasing fuel from O.W. Bunker, CGG would notify O.W. Bunker of its anticipated fuel needs and the estimated date that the M/V BOURBON PETREL, M/V OMS RESOLUTION, and M/V MISS LILLY would arrive in Port Fourchon to receive the fuel. O.W. Bunker would contact Martin Energy and Stone Oil to determine their fuel availability and the sales price, which O.W. Bunker would then communicate to CGG. CGG instructed O.W. Bunker to purchase fuel from the supplier with the lower cost, Martin Energy.

         (8)

         For each of the transactions at issue here, a. CGG issued purchase orders to O.W. Bunker for the fuel to ...


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